Why health care eats more of your pay­check ev­ery year

The price of in­sur­ance is go­ing up next year

Kuwait Times - - HEALTH -

NEW YORK:

Mil­lions of Amer­i­cans are find­ing out this month that the price of their health in­sur­ance is go­ing up next year as it did this year, last year, and most of the years before that. And it’s not just that the price is go­ing up, it’s that it goes up faster than wages and in­fla­tion, eat­ing away at our abil­ity to pay for other things we want (beer, tele­vi­sions, va­ca­tions) or need (rent, heat, food).

Does it have to be this way? Why does health care grow so much faster than al­most any other spend­ing cat­e­gory so con­sis­tently? And will it ever stop? “At some point it’s not go­ing to be worth it to have less food, less travel in or­der to spend money on health care,” said Louise Sheiner, a health economist at the Brook­ings In­sti­tu­tion. “That’s what re­ally stops it.”

In­sur­ance pre­mi­ums, which re­flect spend­ing on medicines, doc­tor vis­its, tests and hos­pi­tal stays, have climbed 213 per­cent since 1999 for fam­ily cov­er­age pur­chased through an em­ployer, ac­cord­ing to the Kaiser Fam­ily Foun­da­tion, which stud­ies health care. Wages, by com­par­i­son, have risen 60 per­cent, while in­fla­tion is up 44 per­cent. Here’s why the price of health care doesn’t grow like, say, the price of dish­wash­ers or blue jeans - and why that’s un­likely to change any­time soon.

It’s hard to shop for health care

In­sur­ers and em­ploy­ers have been try­ing for years to make pa­tients bet­ter health care shop­pers and force doc­tors and hos­pi­tals to com­pete on price. They’ve raised de­ductibles or out-of-pocket costs on cov­er­age and given tools to pa­tients so they can com­pare prices and qual­ity. The idea is that pa­tients be­come more mo­ti­vated to price shop when they first have to pay sev­eral hun­dred dol­lars to­ward the bill due to a high de­ductible. Many see this push as a key to curb­ing health care spend­ing, since in­sur­ance tends to hide the full cost of care from the pa­tient. This can work ... for small stuff, said Renya Spak of the ben­e­fits con­sul­tant Mercer. Pa­tients will shop if they need an MRI exam on their shoul­der. But Spak isn’t con­vinced it will do much for things like surg­eries, when the in­surer or em­ployer will wind up cov­er­ing much of the bill any­way and the best deal might in­volve travel away from fam­ily. “It’s not hu­man na­ture to be ra­tio­nal thinkers about health care cost de­ci­sions,” she added. “It will never be just like buy­ing a lawn­mower.” Con­sumers also pri­or­i­tize health care pur­chases over other buy­ing de­ci­sions, es­pe­cially if they have ba­sics like food and shel­ter cov­ered. You’ll have back surgery to al­le­vi­ate chronic pain before you take that long-awaited trip to Paris. “What good is a bet­ter house if you are too sick to en­joy it?” said Charles Roehrig, an economist and vice pres­i­dent of the non­profit Al­tarum In­sti­tute’s Cen­ter for Sus­tain­able Health Spend­ing.

Tech­nol­ogy doesn’t help

A car­maker can knock down the cost of mak­ing a ve­hi­cle by re­plac­ing auto work­ers with robots in parts of the assem­bly line. Treat­ment ad­vances in health care are geared more to­ward mak­ing some­thing more ef­fec­tive, not cheaper, noted Paul Fron­stin, an economist with the Em­ployee Ben­e­fit Re­search In­sti­tute. A de­vice maker may come up with a new hip that im­proves a pa­tient’s qual­ity of life, but it’s likely more ex­pen­sive and the surgery might re­quire the same num­ber of doc­tors and nurses or more. —AP

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